The Build to rent industry in Australia is relatively smaller than it is in the rest of the world, but statistics have shown that the conditions are set for a large-scale introduction in Australia. To get ahead in a market that holds so much promise, but still in an infant stage, there are quite a number of things you must know, and in this article are some of them.
Regardless of the type of commercial property investment any real estate investor is involved, the knowledge of the demographics he is serving is critical to his success in the rental investment, including build to rent investments.
It is important to know: for who, where and even what you are building before you go fully into any commercial property investment like build to rent. And according to CBRE’s report outline on build to rent, although building properties for the sole aim of renting them out has not yet quite taken off in full in Australia, the conditions are ready and the model can work when it does take full effect –but we insist that you must know the demographics before launching into the industry of commercial property investment.
There is a level of unaffordability in housing especially in the metropolitan market in Australia, and this has made owning a home quite a difficult prospect, consequently, the CBRE’s report has claimed that this difficulty currently in the market will make build to rent a nice opportunity for investors, thereby catering for the increasing number of renters who are in the market.
Data shows that in the Pacific, couples represent the largest demographic segment (53%) currently living in the limited build to rent apartments, while at 20% are individuals, and then couples with kids are at 13%. Then there are flatmates at 8% and single parents at 6%. This information should help you structure what kind of apartment you want to build, or what kind of value-added services you want to render.
Although build to rent properties may commonly have similar characteristics in most places, there are different areas of interest for different demographic and several socioeconomic markets, and understanding this will help you focus your services for these various target groups. What this means is that the makeup of the asset an investor going into commercial property investment will build will depend on the type or group of the market he intends to target.
For instance, if you are a developer who wants to target families of young couples or singles, then it makes sense to build a combination of one or two bedroom units because this will be the most popular among this group of customers. Also, the location must be close to transportation to ease moving around for this group and should also have a good number of social amenities around, like entertainment precincts and retail stores.
For business people who are not interested in building a house, they can also tap from the several opportunities made available by the presence of build to rent homes. A close look at the kind of build to rent homes predominant in an area is all that is needed to know the kind of business to set up in that area. Also, there is a need to know what is lacking in an area, fill the void and smile to the bank.
The entrance of build to rent homes to the Australian market will indeed provide opportunities to those looking to go into commercial property investment and also to those willing to take advantage of build to rent properties to establish their business.